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Visa says suspending services to sanctioned Russian banks

U.S. payment-card firm Visa said on Tuesday it would suspend network services to Russian banks SMP and InvestCapitalbank, which were sanctioned on Monday by the United States, in order to comply with U.S. law, Reuters reported.

"We regret any disruptions that the institutions, their cardholders or merchants may experience," Visa said in a statement. "All of Visa's systems are processing normally, and we continue to service our other unaffected Russian clients."

Rival MasterCard Inc said on Monday it would suspend services in the near future to cards issued by SMP bank and InvestCapitalbank.

InvestCapitalbank and SMP bank were hit with sanctions on Monday in retaliation for Russia's involvement in Ukraine. Both banks are controlled by the Rotenberg brothers, Boris and Arkady.

The Rotenbergs, linked to big contracts on gas pipelines and at the Sochi Olympics, were named on a previous U.S. sanctions list issued in March after Russia annexed the Crimea region of Ukraine.

Russia recently revived plans to develop its own card payment system to cut its dependence on Visa and Mastercard after U.S. sanctions led to disruptions in their services last month. Both stopped providing services for payment transactions for clients at Bank Rossiya and its unit Sobinbank after the March sanctions.